Vice Presidents Anonymous is a support group for recovering VPs, much like Alcoholics Anonymous is for alcoholics. But instead of sharing stories about struggles with alcohol, we share stories about struggles with greed, sleaze, aggression, delusion, paralysis and imbecility .   

  1. Carpenter, Michael; Denunzio, Ralph—The Kidder Peabody Saga

    • ​​​Ralph Denunzio runs a company like blind man weaving through traffic

    • What did we expect out of Jack Welch? He who sleeps with dogs gets fleas, right? He wouldn’t have bought Kidder Peabody if he’d known there was a “skunk,” but we imagine he was already pretty used to the smell at that point. The more changes he made (ie, hiring Carpenter), and the more he tried to soothe customers’ concerns by pouring money into Kidder, the more errant the company’s path became—like a petulant child who won’t get a job and move out. But this was Welch’s child.

    • Carpenter may not have been the best choice. He tried to turn around the Peabody’s poisonous culture with a bold plan to improve the traders, to improve their personal business ethic—without having a brokerage license himself. And Peabody dealt securities! Last we heard the CFPB was targeting him for ripping off minority communities.

    • Kidder Peabody’s problems didn’t start with the Joe Jett scandal, or any other scandal you can think of (Martin Siegal, bonds trading—whatever suits your fancy). It started with their culture of aggressive, reckless trading in the unmitigated pursuit of profit. It’s a culture that finds roots in Walter Wriston’s (who was on the board of GE at the time of their purchase of Peabody) philosophy and fruits in John Stumpf’s massive scam. The reason Jack Welch kept uncovering problems in K-P is that the cancer of greed had spread to all of its branches—and throwing money to fix it only enabled its corruption. Stressing “the high-powered profit growth” that GE’s businesses were “supposed to have,” Welch sought the very end that had poisoned Peabody’s culture in the first, with their blind pursuit of profit. When profit is the bottom line of a deal, you stay staring at that bottom line like everything above it, everything that got you there doesn’t exist. That’s how you get your Joe Jetts. That’s how you get ’07.

  2. Case, Steve—AOL

    • ​​What made the Time-Warner-AOL merger such a bust? Case was doing so well with AOL in the 90s, and then…?

      • Big hopes, little results. Gerald Levin, CEO of Time Warner, predicted 30% growth from the merger—no matter how you split it, it would be hard to make that up to investors, even without the bursting of the internet bubble soon after.

      • With friends like these…

        • “Above all, what Time Warner executives and investors resent is this: with a remarkable sense of timing, Case used AOL's then inflated stock to buy their company. That sleight of hand took place in January 2000, just two months before the meltdown of Internet stocks. “

  3. Cayne, James—Bear Stearns

  4. Cheney, Dick—Halliburton

  5. ​Connolly, Walter—Bank of New England

  6. Clausen, A.W.—Bank of America

  7. Corzine, Jon—MF Global Holdings

    • ​​Ah yes, the ol Wall Street--Capitol Hill revolving door we've come to know and love. Sachs to Senate, Executive Office to Executive Officer: Corzine made himself quite comfortable among the Amtrak Elite. But when he lost his gubernatorial reelection to Chris "Augustus Gloop" Christie, he had to get back in front somehow. MF Global saw in him a capable CEO who knew the ins and outs and the right doors to knock on; Corzine saw in MF Global his redemption. He became a "obsessive" trader, lodging a $6.3 billion bet on government securities for deeply indebted European nations--enough to "wipe out the firm five times over if it went bad." It went bad.

      • The ratings agencies "knew the risks for months but, as they did with subprime mortgages, looked the other way until it was too late." When they uh, stepped up (I guess), and downgraded the bonds to junk status, MF's CFO claimed "our capital and liquidity has never been stronger." Sure, you can make that argument when you dip into $891 million worth of liquidity in your customers' accounts to try and save your firm. Corzine directed damage control, organizing a team to find a buyer for MF Global while he tried to sell its assets. 

      • ​​

    • Interesting. So Corzine handles the sale of the companies assets in the "chaos" that ensued, the company's representatives made sure to stress post-disaster. He sells the assets, but when asked just how $891 million of someone's money disappeared in the "chaos" of all the transactions, Corzine throws his hands up, exasperated, "How the hell should I know??" Murkiness over his role in knowing just where the money came from, the fact is that he should have known. 

    • One thing is for certain: he didn't care about the customers, and do with that what you will.. A lovely quote from him is that, after pointing out that his bet actually turned out well in the end, he said, "There actually were no losses." Over $1 billion (later repaid)? One of the top 10 largest bankruptcies in United States history? Hm.